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mbffea

Which area?

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Hello everyone from a newbie wanna be property investor. I am in the process of getting educated and getting quite frustrated as I can't manage to decide in which location to invest. I am based overseas, which makes it easier since wherever I will end up investing it will be "difficult" anyway...

Obviously a lot depends on my objectives, I understand that. My idea is to start with some good yielding BTLs, perhaps on a BRR model, and possibly move to HMOs or SA at a later stage. To be honest I don't need the highest cash flow or the highest capital appreciation, I am looking for a mix of both, and perhaps a location where I will be able to implement different strategies without scattering around the Country. I have been looking at Liverpool and Manchester and I just can't make my mind up as both have pros and cons. One important aspect is that I have limited access to mortgage products and I can only get financing for properties valued at 100k or above, which might represent an issue when looking at the cheaper end (often higher yielding) of the market. 

Thank you in advance for any help :)

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Hi Mbffea,

Wonderful to hear that you’re looking to get into property investment!

It’s great to see that you already have an idea of what you want and some plans for the future. Manchester and Liverpool are great places to invest, both for yields and capital appreciation.

Be happy to help, let me know if you have any further questions.

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Hi mbffea

Sounds like you're after a bit of everything there! A bit of BTL / BRR / HMO / SAs, income, growth...

What's your 'Why' for investing in UK property? There's the obvious financing, tax and currency implications investing as a non-resident. You mention funding the purchase via a mortgage. Have you discussed the plans with a broker or is it based on your estimate? 

If you did decide on a location, will you be visiting these properties, or relying on family/friends to view, a property sourcer, Viewber? How will you manage the property once you purchase it?

Just a few queries to add to your list, as location isn't the only thing to think about. Once you've got the other ducks lined up, the location will come to you. There's the usual fundamentals - regeneration, employment, transport links, schools - so most of the larger UK cities will tick those boxes.

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Thank you so much for the feedback, very useful and much appreciated! 

My "why" is to create a semi-passive income stream which will allow me to stop exchanging my time for the money I need to survive. I have been in touch with several mortgage brokers and I have been confirmed I can get finance for BTL properties worth 100k+. Financing for other strategies like HMOs is also available, but only after I have built a track record with BTLs, hence this is where I would like to start from. 

Given that I am based overseas I need to build a local network and power team, this is why I am so concerned with location. If I invest time and resources to build a team in, say, Manchester, if I then decide to invest in Liverpool I would kind of have to start from scratch. 

Both Manchester and Liverpool logistically work very well for me as I have direct flights. I have visited the cities and I have spoken with several people and of course everyone has his own opinion. I would like to able to have an opinion too, which at the moment I don't due to the fact that I don't know how to research, interpret the fundamentals, would anyone be kind enough to give some guidance in this sense? 

How do you use regeneration information? For example both cities I am looking at do have regeneration projects going on, how would you weigh this information? 

When looking at employment, income, crime rates and so on there are significant differences among one neighbourhood and another of the same city, how do you use this data then?

Where do you invest and, let alone proximity, for which reason? 

Thank you in advance for any further help :)

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Off the back of your goals, I guess it depends on what type of tenants you're looking to attract.

Some big generalisations here, but:

  • City centres tend to be apartments, which in turn attract the city professionals, younger couples with no kids
  • Slightly further out from city centre you'll get terraces, which attract workers and families, especially if it's close to good schools. 

So perhaps, start from the city centres of Manchester and Liverpool, see what you can achieve there. Then slowly work your way out mile by mile. With technology these days, you can do a significant amount of laptop research. 

If you also search for 'Manchester' and 'Liverpool' in the search field here, it should also bring up some threads about particular areas in each city. 

Type of research I tend to do for areas include:

  • Reading the local papers online (e.g. Manchester Evening News has a property section)
  • Reading other websites specifically catered to the North West (e.g. Place North West)
  • Google Maps - can help identify any large employers in the area (e.g. hospitals, industrial areas)
  • Locrating - a website that shows the rating of schools in the area to help identify a good catchment area
  • Postcodearea / Streetcheck - websites that provide info about the demographics, crime, population size etc.

If all that seems like too much work, you can always work with a property sourcer that can offer a 'hands off' type investment where they find the location and deals for you.

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Only know bits of Liverpool, but areas like Crosby, Aigburth, Mossley Hill are nice, if you don't want city centre. They'll be £100-150k, although lots are apartments in that range and will offer a reasonable yield and decent capital potential.

For Manchester, £100k+ will let you into lots of it. Stick to within about 5 miles of the city centre, as the towns further out will be cheaper but probably slower growth. Some of the bigger towns e.g. Bolton have their own large centres and lots of people will work there and live in its suburbs, so plenty of demand, but the centre of Manchester is continuing to expand and control the region, so decent access to that is always most desirable.

The south/west generally grows more strongly than the north/east and outside the M60 is generally more expensive than inside (except the City Centre), with the exception of Didsbury and Chorlton which are very much in demand as places to live for both younger singletons and families. Lot of generalisation there, but usual rings of city centre, inner city and suburbs.

£100k will avoid most of the worst areas, so you won't go wrong, although the hot areas are probably closer to £150k now. Look for decent transport into the city centre, tram lines help but there are other strong areas like Edgeley which is close to Stockport centre and station. If you want to be a bit braver, you could take a guess at how quickly the city centre will grow and in which direction. Places like Ancoats were very undesirable 10 years ago and is now apparently the 13th coolest place in the world, with prices to match. Go 500m further out and it's not trendy and prices are still relatively low. Will it stay like that? There's huge plans for the whole area between the Etihad Stadium and the city centre, with an HS2 station in the area next to Piccadilly, so could be very desirable, but if HS2 doesn't happen...

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Thank you very much for your inputs, I will start my research from here. I will most probably be working with a sourcer as he or she will hopefully have access to better deals, however I want to be able to do my due diligence. 

In terms of actually getting things done, I suppose a plain vanilla BTL should be easily manageable on my own even if based abroad. This would mean working with agents, solicitors, valuers, mortgage brokers, and the lot, plus a few trips to the UK which I am happy to do. What about the refurb should I go for a (light) buy, refurb and refinance? Would I be able to build and manage the necessary power team in order to get things done in a proper and reasonably timely manner? Perhaps working with a project manager? Or should I not bother and rather go down the JV route? Would this mean sharing the profit on a 50/50 basis? My plan is to buy 3 to 5 properties over the next 3 years, hopefully more over the long term, therefore I am thinking that perhaps I would be able to leverage the effort of building and managing a local "team", which would mean a significantly lower cost compared to a profit sharing JV.

Not having the experience I am just not in the position of assessing how hard this actually is, how many things can go wrong and how many of them can be managed effectively delegating, outsourcing, systemising, ecc. I have time available and it is something I would actually like to do, I think I will enjoy it more than just being some sort of passive investor. I just don't know whether it is feasible remotely, considering that I would be happy to visit on average once a month, I think more would become a bit complicated. Door to door to both Manchester and Liverpool takes me around 4/5 hours and sometime I think that it is not so much different from someone working in London and investing up North, which does seem to be a rather popular choice...

Thank you :)

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